Human resource management practice I also available by michael armstrong

Part 

1

  The Practice of Human Resource Management

72

tabLe 

5.1

 

A summary of human capital measures and their possible uses

Measures

Possible use: analysis leading to action

Workforce composition – gender,  

race, age, full-time, part-time

Analyse the extent of diversity

Assess the implications of a preponderance of employees in 

different age groups, eg extent of losses through retirement

Assess the extent to which the organization is relying on 

part-time staff

Length of service distribution

Indicate level of success in retaining employees

Indicate preponderance of long- or short-serving employees

Enable analysis of performance of more experienced 

employees to be assessed

Skills analysis/assessment –  

graduates, professionally/technically 

qualified, skilled workers

Assess skill levels against requirements

Indicate where steps have to be taken to deal with shortfalls

Attrition – employee turnover rates for 

different categories of management and 

employees

Indicate areas where steps have to be taken to increase 

retention rates

Provide a basis for assessing levels of commitment

Attrition – cost of

Support business case for taking steps to reduce attrition

Absenteeism/sickness rates

Identify problems and need for more effective attendance 

management policies

Average number of vacancies as  

a percentage of total workforce

Identify potential shortfall problem areas

Total payroll costs (pay and benefits)

Provide data for productivity analysis

Compa-ratio – actual rates of pay as  

a percentage of policy rates

Enable control to be exercised over management of pay 

structure

Percentage of employees in different 

categories of contingent pay or  

payment-by-result schemes

Demonstrate the extent to which the organization believes 

that pay should be related to contribution

Total pay review increases for  

different categories of employees as  

a percentage of pay

Compare actual with budgeted payroll increase costs

Benchmark pay increases

Average bonuses or contingent pay 

awards as a % of base pay for different 

categories of managers and employees

Analyse cost of contingent pay

Compare actual and budgeted increases

Benchmark increases

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